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3 ways marketers can measure ROI

Here are three of the best ways to measure ROI:

1. First-touch attribution

Many marketers use first touch as the source of truth for attributing marketing ROI. B2B marketers commonly refer to first-touch attribution as Lead Source. In a first-touch attribution model, the first place your customer discovers your brand will receive full credit for any subsequent sales.

For instance, lets say your prospect discovers your company by clicking on a Google ad. The prospect then visits your website and signs up for your email newsletter. A day later, the prospect opens an email from you, clicks on a product and then makes a purchase for $100.

With first-touch attribution, the Google ad would receive revenue attribution for this sale of $100. All future sales completed by that customer would also be credited to the Google ad.

Pros: Knowing where the initial contact occurred that led to a sale is critical to understanding which campaigns are pulling in your customers.

Cons: Depending on the purchase, a lot can happen between initial interaction and when a customer buys. First-touch attribution doesnt reflect these subsequent touches.

2. Last-touch attribution

Think of last-touch attribution as the final marketing activity that converted a prospect into a customer. In the example above, your email campaign would receive revenue credit for driving this sale. The last thing your customer did before making a purchase was open and click on a product within an email. Therefore, that email would receive credit for driving the $100 sale.

Pros: Easy to understand; captures the all-important final action a customer took before purchasing.

Cons: Ignores all previous marketing efforts that helped a prospect discover your brand. In the example above, last-touch attribution misses the fact that your customer wouldnt have received your email without first discovering your brand on Google.

3. Overall influence

While first-touch and last-touch attribution models only attribute revenue to a single marketing event, influence-based attribution gives revenue credit to any marketing event that led to a customer purchasing. In our Google/email example, both Google and email would receive equal revenue share for driving the sale. In this example, marketers would either:

  • Give 50 per cent of the value of the purchase to both Google and email: Google – $50, email – $50; or
  • Give 100 per cent of the value of the purchase to both Google and email: Google – $100, email – $100

Pros: Provides a straightforward attribution model that takes into account every marketing touch point.

Cons: Treats every touch as having equal value, which isnt always the case.

Choosing the right model for you

When it comes to revenue reporting, there may not be a silver bullet. Seek to understand the buying process your customers take when purchasing your products. When you know how your customers evaluate your products, youll have the data you need to select the revenue attribution model that best reflects how marketing contributes to sales.

Adam Steinberg is Director of Emerging Apps, Silverpop.


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